7 Ways Your Money Will Never Be The Same

Take a look at this article that was on MSN today. The article talks about how a lot has changed since the start of the recession and they point out the 7 ways your money will never be the same:

1. Stocks are no longer king
As share prices keep rising, blogs and investor chat rooms crackle with rancorous shouting matches between folks who say the gains are justified and those who deride the charge in the Dow Jones Industrial Average from 6,500 past 10,000 as a "sucker's rally." But the rally is legit because, at 6,500, stocks were priced for a disaster that never occurred and because many sectors of the economy have improved noticeably since the darkest days of the crisis...

2. Diversification has changed dramatically
Once, you could fight a down market with counterweights like real-estate investment trusts, high-dividend stocks and foreign stocks. In 2000 and 2001, for instance, many small-compand and value funds and overseas stock funds made money even as the large-capitalization U.S. stock indexes tanked. During the 2007-09 bear market, virtually every asset class save Treasury bonds fell in unison. As a result, many experts have declared diversification a failure...

3. Cash is never trash
Forget that cash, in the form of money market funds and bank savings accounts, pays next to nothing. Yields will nudge higher once the Federal Reserve lets go of its free-money policy. But even if that enables you to collect just 2%, never again should you equate cash with garbage...

4. Regulators will be more visible
More oversight is coming, and it will go beyond executive pay and fixing bank balance sheets. After Congress finishes dealing with health care, it will establish a financial-protection agency for consumers, increase regulation on private-equity investors and hedge funds, and generally try to discourage the financial industry (in the U.S., anyway) from concocting inscrutable, high-risk stuff. There's an excellent chance that future Madoffs and Enrons won't be able to dodge the law for so long...

5. Catastrophes won't wait 100 years
Some people have likened the recent disaster to a 100-year flood, suggesting that we are unlikely to suffer another event so serious for a century. The problem with this 100-year cliché is that it's never been true. And now it is utterly implausible...

6. Commodities will be more important
Gold isn't the only tangible asset that has racked up big gains in 2009. Cocoa, coffee, copper and frozen pork bellies, to name a few others, are also in rollicking rallies. The breadth of the advance reinforces the idea that investors will want to make more room in their portfolios for stuff as well as securities, regardless of whether they're trying to reduce risk or are angling for big gains. It's not that commodity prices are predictable. They can react to the weather, world politics and currency exchange rates. But because it's become a lot easier to invest in commodities, it's a good bet that they will play an ever-larger role in savings programs...

7. Bonds will be less volatile
This sounds like double talk, given that rising interest rates cut the value of existing bonds by making new, higher-yielding bonds more desirable. And rates look to have only one way to go, which is up. Clearly, holding a long-maturity Treasury bond that pays less than 4% is a dicey proposition...

So Portland, let me know what your thoughts are on this article by leaving some comments in the section below.